Barclays Cuts Qualtrics Price Target By 6%

Barclays analyst Raimo Lenschow maintained Qualtrics International Inc XM with an Equal-Weight and lowered the price target from $32 to $30 after its Q1 beat.
Lenschow did not see considerable upside despite its continued performance, especially in terms of billings and net retention as the stock traded at a premium versus peers who saw valuations slip on macro uncertainty concurrently.
Lenschow's Positives included: (1) Calculated billings beat consensus by ~8% and grew ~44% y/y (albeit with contribution from Clarabridge) and drove a beat across the P&L. (2) Net retention remained strong at 128% without Clarabridge in the numbers yet, and commentary stated +120% is a stable level. (3) Large customer momentum continued with the number of >$100k customers growing +40% for the second consecutive quarter.
Negatives included: (1) Operating margin missed consensus expectations in the quarter, and guidance also came in lower than expected for Q2 and the FY as increased T&E and purchase price accounting for Clarabridge weigh. (2) Although this metric can fluctuate with the mix of multi-year deals, cRPO growth of 52% decelerated from 57% in Q4.
Price Action: XM shares traded lower by 7.52% at $22.51 on the last check Friday.